While resignations can be relatively common in the workplace, the nature of these can vary significantly.
While most resignations are voluntarily, in some cases an employee may feel they are forced to resign due to the conduct or actions of their employer.
These scenarios can be very challenging for workers and can also lead to unfair dismissal claims against their employer.
So, what exactly constitutes a ‘forced resignation’? And what are the implications for you as an employer and workers?
What constitutes a ‘forced resignation’?
The term ‘forced resignation’ might sound a little unusual, but these situations do occur. So, when exactly can a resignation be considered as having been ‘forced’?
The Fair Work Commission explains that a forced resignation, also known as a ‘constructive dismissal’, occurs “when an employee believes they have no real choice but to resign.”
This type of conduct can be quite broad in nature and may involve:
- the employee’s perception of workplace bullying or harassment by an employer or colleague, poor treatment in the workplace, the underpayment of employee entitlements or if an employee has serious safety concerns regarding their employment; or
- unauthorised changes to an employment agreement – e.g. pay cut, demotion, alteration of working hours or a relocation; or
- resignation if it occurs at the express insistence of an employer.
Overall, a forced resignation is considered to have occurred when, due to the conduct of behaviour of the employer, an employee feel they have no other option other than to resign.
Voluntary resignation or unfair dismissal?
So, if a worker is forced to resign, what are the implications for both employee and employer?
Under the Fair Work Act, an employee cannot make an unfair dismissal claim unless termination of employment is at the initiative of the employer.
However, if an employee can demonstrate that they had no effective alternative but to resign from their position, they are then entitled to proceed with an unfair dismissal claim.
To demonstrate that a resignation was forced, it must be shown that the employer’s conduct was the principal contributing factor in the employee’s resignation.
In instances where it has been found that the situation constituted a forced resignation, the Fair Work Commission has allowed unfair dismissal claims to proceed – e.g. a 2012 case involved an employee who resigned from his position after being underpaid by his employer for approximately four months.
The FWC ruled that, in this case, reinstatement of the employee was not appropriate and the employer was ordered to pay compensation for the worker’s lost wages.
Overall, the Fair Work Commission notes that “the line distinguishing conduct that leaves an employee no real choice but to resign from an employee resigning at their own initiative is a narrow one”.
It is important to remember that context and details are important, and that the bar can be quite high for demonstrating that a resignation was forced.
As the team at Marshalls, Dents and Wilmoth explains, while “a failure to pay wages or superannuation may justify resignation…payment of wages a few days late is unlikely to be sufficient to establish” a forced resignation.
Akyra’s Key Takeaways
- A resignation may be considered forced if it is the result of the actions or conduct of an employer which result in an employee feeling as if they have no choice but to resign
- The specific conduct which may lead to a forced resignation can vary, though it may consist of actions or conduct such as bullying or harassment, underpayment of entitlements, or at the insistence of an employer
- An employer may be vulnerable to an unfair dismissal claim if their conduct is found to constitute a ‘forced resignation’
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Disclaimer – Reliance on Content
The material distributed is general information only. The information supplied is not intended to be legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.
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